Group 1 Automotive Inc. research snapshot
GPI AI stock analysis reads Group 1 Automotive as a well-run auto dealership consolidator caught in a post-COVID earnings normalization while it cuts costs and buys its way into Atlanta. At the August 4, 2026 data cutoff, the latest verified quote was $288.41 on August 3, 2026 at 1:25 PM EDT, up 0.57% from the $286.77 July 31 close, with market capitalization near $3.40 billion. The stock trades at about 12.2x trailing GAAP earnings and roughly 6.8x forward adjusted earnings, about 5% above its 52-week low of $274.27 and 41% below its 52-week high. Q2 2026 results released July 30 showed revenue of $5.4 billion down 5.6% year over year, GAAP diluted EPS of $8.64 down from $10.82, and adjusted EPS of $9.61, alongside a $1.3 billion Hennessy dealership acquisition expected to be immediately accretive. This is informational research and not investment advice.
Current price
$288.41
Market cap
$3.40 billion
AI score
52 / 100
Rating
Cheap cyclical value stock with strong capital returns and an earnings downcycle in progress
Trend status
Below all major moving averages and near the 52-week low
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | Group 1 sells new and used vehicles, parts, service, collision repair, and F&I through 251 dealerships in the US and UK. Vehicle sales are high-volume and low-margin, while parts and service add higher-margin recurring revenue; Q2 2026 gross profit per unit held steady even as volumes fell. | Medium-high |
| Moat | The moat is moderate and comes from manufacturer franchise agreements that limit supply, cluster-market density for service retention, and scale in procurement, marketing, and F&I economics. Customer switching costs are low, but the service relationship creates recurring local revenue. | Medium |
| Management | CEO Daryl Kenningham leads a cluster strategy built on M&A and buybacks; FY2025 was the largest repurchase year in company history at $550 million. Q2 2026 delivered cost cuts of 700+ headcount and $50 million plus ahead of target, and Daniel McHenry added the UK CEO role while remaining CFO. | Medium |
| Financial trend | Revenue grew from $13.5B in FY2021 to $22.6B in FY2025 through acquisitions, but net income fell from $552M to about $325M over the same period as post-COVID margins faded. Q2 2026 GAAP diluted EPS of $8.64 was down 20% year over year, and gross margin compressed from 18.3% in FY2022 to about 16.0% in FY2025. | High |
| Valuation | At about 12.2x trailing GAAP earnings, 6.8x forward adjusted earnings, 0.15x sales, and 1.19x book value, GPI looks inexpensive on an absolute basis, but earnings are falling and leverage is high. The discount reflects cyclical risk, debt, and a competitive industry. | Medium |
| Technical trend | GPI traded at $288.41, below its 5-day ($316), 20-day ($314), 50-day ($314), 100-day ($322), and 200-day ($353) moving averages, with 14-day RSI near 40 and 14-day ADX near 18. The stock sits about 5% above its 52-week low of $274.27 after falling 41% from the 52-week high. | Medium-high |
| Risk level | Key risks include an auto cycle downturn, affordability and negative equity, high debt (net debt near $5.6B against $164.5M cash), rising interest costs, rebranding-driven traffic disruption, used vehicle sourcing, after-sales defection as 2020-2022 cars exit warranty, and EV or OEM-direct structural change. | Medium-high |
| AI confidence | High confidence for business structure, filings, market cap, technical levels, and balance sheet math. Lower confidence for near-term earnings direction and the timing of any cyclical recovery. | Medium-high data confidence |
| Investment certainty | Medium-low certainty. The cheap valuation and buyback program provide a base, but earnings are in a downcycle, leverage is elevated, and the market forward estimates assume a sharp adjusted EPS recovery that has not yet shown up in GAAP results. | Medium-low |
GPI AI stock forecast
The GPI AI stock forecast uses scenario ranges around the $288.41 August 3, 2026 cutoff price. It does not claim AI can predict a specific price. The bullish case assumes affordability improves, rebranding disruption fades, and the Hennessy acquisition closes accretively. The base case assumes continued earnings normalization with the stock range-bound near current levels. The bearish case assumes a deeper auto downturn and further margin and earnings compression.
$380 to $450
More likely if new vehicle affordability improves, same-store volumes recover, the $1.3 billion Hennessy deal closes by year-end and adds about $1.7 billion of high-margin annualized revenue, the $50 million plus cost program keeps showing through, and the market re-rates GPI toward 11-13x GAAP earnings on recovering EPS.
$260 to $330
More likely if earnings stay under pressure for several quarters, the stock holds near its 52-week low zone around $274-$288, leverage stays elevated while the Hennessy debt is absorbed, and GPI trades near 9-11x trailing earnings.
$170 to $240
More likely if the auto cycle turns down sharply, used vehicle sourcing costs rise, the Hennessy funding or integration disappoints, interest expense grows, and the multiple contracts to 6-8x on declining EPS.
GPI AI technical analysis
GPI AI technical analysis starts from the $288.41 August 3, 2026 intraday quote used for this August 4 static page. StockAnalysis.com reported the stock below its 50-day moving average near $313.68 and 200-day moving average near $353.48 with RSI near 40.28, and Barchart showed the 5-day, 20-day, and 100-day moving averages near $315.92, $314.30, and $322.19 with 14-day RSI near 40.08, 14-day ADX near 17.88, and 14-day ATR near $18.13. Because this page does not fetch request-time market data, traders should confirm levels on a live chart before acting.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $288.41 | Latest verified quote on August 3, 2026 at 1:25 PM EDT, up 0.57% from the $286.77 July 31 close, within a session range of $287.38 to $297.00. |
| Near support | $274 to $280 | The 52-week low of $274.27 sits just below. A test of this zone would show whether the downtrend base is holding. |
| Secondary support | $260 to $270 | A break below the 52-week low would open the $260 area, a level not seen in several years. |
| Near resistance | $313 to $316 | The 50-day moving average near $313.7 and the 5-day moving average near $315.9 form the first resistance band. |
| 20-day moving average | About $314 | Barchart showed the 20-day MA near $314.30 and StockAnalysis.com confirmed GPI below it at the cutoff date. |
| 200-day moving average | About $353 | The 200-day MA near $353.48 is well above the current price and marks the broader downtrend ceiling. |
| Momentum | RSI about 40, ADX about 18 | 14-day RSI was 40.28 on StockAnalysis.com and 40.08 on Barchart, weak but not oversold. ADX near 17.88 with -DI 34.6 above +DI 28.1 points to a weak bearish trend. |
| Volume | About 132,000 shares on Aug 3 | Volume of about 131,738 shares by 1:25 PM EDT on August 3 was below the 20-day average near 198,000. |
| Volatility | 14-day ATR near $18.13 | ATR near $18.13, about 6.3% of price, is elevated after the post-earnings move and the recent analyst downgrades. |
| Invalidation | Close below $274 or above $316 | A sustained close below $274 would break the 52-week low. A close above $316 would reclaim the near-term moving averages and suggest stabilization. |
GPI AI trading strategy
The GPI AI trading strategy is a rules-based framework, not personalized advice. It evaluates the cyclical auto retail industry context, the current technical trend below all major moving averages, and position sizing principles.
GPI trades below all major moving averages and near 52-week lows. A trend-following approach waits for price to reclaim and hold above the $313-$316 moving average band with improving volume before treating the downtrend as possibly exhausted.
A failed attempt at the $313-$316 zone or a new low below $274 would reinforce the downtrend and reduce confidence in a reversal setup.
GPI trades at about 12x trailing GAAP earnings and 1.19x book value with a 0.76% dividend yield and an active buyback program. A value-aware approach monitors earnings stabilization, margin recovery, and leverage before considering entry near the $274-$280 support zone.
Cheap cyclical stocks can become cheaper. Average down only with a clear earnings recovery thesis and a defined maximum position loss.
Track same-store vehicle volumes and gross profit per unit, parts and service growth, rebranding-related traffic recovery, used vehicle sourcing costs, Hennessy closing and funding, interest expense, and buyback activity. Earnings recovery and deleveraging are the catalysts for a re-rating.
Lower the rating if net income keeps declining, rent-adjusted leverage stays above 4x for long, or the dividend is threatened.
Investment research summary
Group 1 Automotive operates 251 franchised dealerships across the US and UK, selling new and used vehicles, arranging F&I, and running higher-margin parts, service, and collision businesses. It consolidates a fragmented industry through M&A, with a cluster strategy in large metro markets.
The moat comes from manufacturer franchise agreements that limit competition, cluster-market density for service retention, and scale in procurement, marketing, and F&I. Customer switching costs are low, but the service relationship produces recurring revenue.
The thesis can fail if the auto cycle turns down, affordability keeps volumes depressed, net debt near $5.6 billion becomes a drag as interest costs rise, used vehicle sourcing costs climb, rebranding hurts traffic longer than expected, or the EV transition and OEM-direct models bypass franchised dealers.
CEO Daryl Kenningham has run an aggressive cluster strategy with heavy M&A and buybacks. FY2025 was the largest buyback year at $550 million, Q2 2026 delivered 700+ headcount and $50 million plus in cost cuts ahead of plan, and the company announced the $1.3 billion Hennessy acquisition expected to be accretive.
Auto retail is consolidating toward scaled public dealers. The industry faces structural uncertainty from the EV transition, OEM-direct ambitions, online used car platforms, and Chinese brands entering the UK. Service and parts revenue remains the defensive growth engine.
At about 12x trailing GAAP earnings, 0.15x sales, and 1.19x book value, the stock prices in a lot of cyclical bad news. A true margin of safety requires evidence that earnings have bottomed and that the $1.3 billion Hennessy debt does not over-lever the balance sheet, not just a low multiple.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| GPI price | $288.41 at 1:25 PM EDT on August 3, 2026, up 0.57% from the $286.77 July 31 close, within a session range of $287.38 to $297.00 after opening at $290.73 | StockAnalysis.com real-time quote (CBOE) | August 4, 2026 |
| Market capitalization | $3.40 billion, consistent with $288.41 times 11.79 million shares outstanding (0.01% deviation via financial_rigor.py) | StockAnalysis.com quote and share statistics, financial_rigor.py market cap verification | August 4, 2026 |
| Share statistics | 11.79 million shares outstanding, down 6.69% year over year and 0.67% quarter over quarter, with a float of 10.74 million, insiders at 2.50%, and institutions at 94.57% | StockAnalysis.com statistics | August 4, 2026 |
| 52-week range and change | 52-week range of $274.27 to $488.39, 52-week change of -29.80%, and a year-to-date change near -26.9% | StockAnalysis.com quote and statistics | August 4, 2026 |
| Q2 2026 GAAP results | Revenue of $5,385 million down 5.6% year over year, gross profit of $860.6 million, operating income of $203.1 million, net income of $103.3 million to common, and diluted EPS of $8.64 down from $10.82 | StockAnalysis.com quarterly income statement and Q2 2026 earnings release | August 4, 2026 |
| Q2 2026 adjusted results | Revenue of $5.4 billion, gross profit of $861 million, adjusted net income of $115 million, and adjusted diluted EPS of $9.61 from continuing operations | Group 1 Q2 2026 earnings call | July 30, 2026 |
| FY2025 results | Revenue of $22.57 billion up 13.2%, with net income of about $325 million (Fiscal.ai $325.2 million, StockAnalysis overview $321.5 million) down from $498.1 million in FY2024 and adjusted EPS of $40.71 | StockAnalysis.com financials and FY2025 earnings release | August 4, 2026 |
| TTM financials (June 30, 2026) | Revenue of $22.15 billion, net income of about $286 million, GAAP EPS of about $23.55, gross margin of 15.95%, operating margin of about 3.1%, and profit margin of about 1.3% | StockAnalysis.com statistics | August 4, 2026 |
| Balance sheet (June 30, 2026) | Cash of $164.5 million, total debt of $5,777 million, net debt of $5,612 million, shareholders equity of $2,952 million, book value per share of $242.30, debt to equity of 1.98, and interest coverage of 2.39 | StockAnalysis.com balance sheet and statistics | August 4, 2026 |
| Cash flow | TTM operating cash flow of about $439 million and free cash flow of about $166 million on the financials page updated July 30; the statistics page reported TTM operating cash flow of $628 million and free cash flow of $382 million, a source difference this page does not reconcile. FY2025 free cash flow was about $425 million. | StockAnalysis.com financials and statistics | August 4, 2026 |
| Valuation ratios | PE of 12.23, forward PE of 6.82, PB of 1.19, PS of 0.15, P/FCF of 8.85, PEG of 0.80, EV/EBITDA of 10.94, earnings yield of 8.47%, and FCF yield of 11.30%; re-verified with financial_rigor.py as 12.25x PE, 1.20x PB, and 8.90x P/FCF | StockAnalysis.com statistics and financial_rigor.py valuation verification | August 4, 2026 |
| Dividend | Annual dividend of $2.20 per share for a 0.76% yield, with 5 years of dividend growth, a 9.34% payout ratio, and an ex-dividend date of June 1, 2026 | StockAnalysis.com quote and statistics | August 4, 2026 |
| Analyst consensus | Buy rating from 12 analysts with an average 12-month target of $401.92, a low of $320, and a high of $462. JPMorgan downgraded to Neutral with a $320 target on July 31, 2026; Seaport cut its target to $420 from $465 with a Buy on August 3; BofA cut to $380 from $410 with a Buy. | StockAnalysis.com forecast page and TheFly analyst summaries | August 4, 2026 |
| Moving averages and momentum | 5-day MA near $315.92, 20-day MA near $314.30, 50-day MA near $313.68, 100-day MA near $322.19, and 200-day MA near $353.48, with 14-day RSI near 40 and 14-day ADX near 17.88 | Barchart technical analysis and StockAnalysis.com statistics | August 4, 2026 |
| Short interest | 982,209 shares short, equal to 8.33% of shares outstanding and 9.14% of float, with a days to cover ratio of 4.58 | StockAnalysis.com statistics | August 4, 2026 |
| Hennessy acquisition | About $1.3 billion for 10 Atlanta dealerships including Lexus, Jaguar/Land Rover, Porsche, Honda, Ford, and Cadillac, with 500 service bays and 280 technicians, about $1.7 billion of annualized revenue, expected immediately accretive and to close by year-end 2026, financed with new debt backstopped by a bridge commitment | Group 1 press release (PR Newswire) and Q2 2026 earnings call | July 30, 2026 |
| Capital returns and leverage | FY2025 buybacks of $550 million, a company record; 2026 year-to-date buybacks of $72 million for 205,190 shares at an average of $353.08 plus $13 million of dividends, with $306.3 million remaining on the authorization. Rent-adjusted leverage was 3.3x at June 30, 2026 (3.2x pro forma) and is expected to stay under 4x after Hennessy closes. | Group 1 Q2 2026 earnings call | July 30, 2026 |
| Cost reduction program | US headcount reduction of more than 700 positions and expense cut of $50 million plus executed in Q2 2026, exceeding targets, with US non-GAAP SG&A leverage of 66.4% of gross profit | Group 1 Q2 2026 earnings call | July 30, 2026 |
This GPI AI stock analysis is an informational tool for research and education only. It is not investment advice, a recommendation, or a guarantee of future performance. Forecast ranges are scenarios based on available data as of August 4, 2026 and can be wrong. Auto retail is cyclical, Group 1 is highly leveraged, and past trends do not predict future results.
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